A Company Issues $20 Million in New Stock

Multiple Choice

A company issues $20 million in new stock. It later uses the cash received to pay off promissory notes. How many different accounts and which account names are affected by these two transactions?

A) 3 accounts involved: contributed capital, cash, and notes payable.
B) 4 accounts involved: contributed capital, cash, liabilities, and accounts payable.
C) 3 accounts involved: cash, assets, and accounts payable.
D) 3 accounts involved: contributed capital, investments, and accounts payable.